WASHINGTON – Senate Republicans gave a chilly reception Wednesday to a White House plan to shift money from Social Security’s retirement funds to cover a looming shortfall in its disability account.
But acting Social Security Commissioner Carolyn Colvin defended the proposal at a Senate Budget Committee hearing. The proposal would shift $330 billion from retirement accounts over the next five years. The shift would stave off an estimated 19 percent cut in benefits should the program become insolvent late next year.
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Shifting money between the two Social Security accounts has been done 11 times before, though such moves have typically been accompanied by moves to strengthen the program’s finances. Republicans controlling the House recently passed a rule aimed at requiring that any shift of funds to the disability program be paired with reforms designed to shore up the program.
“The federal government’s primary program to assist the disabled will soon be broke,” said Budget Committee Chairman Mike Enzi, R-Wyo. “Regrettably, President Obama isn’t doing anything to ensure that this never ever happens again. His effort to paper over the problem is a classic example of Washington ducking a real American need.”
But Bernie Sanders, I-Vt., said Republicans were trying to spark a crisis to force cuts to the benefits of the 11 million people currently claiming disability benefits. The liberal Sanders and Democrats on the panel said the longer-term problem could easily be fixed by subjecting income above $118,500 to Social Security taxes
“A Wall Street CEO who makes $20 million a year pays the same amount into Social Security as someone who makes $118,500. That is wrong,” Sanders said.
Republicans say shifting money from retirement accounts to the disability fund would shorten the solvency of the retirement program. They’re pressing for a longer-lasting solution, though they hesitated to suggest what benefit cuts or tax increases would be required to stabilize the program.
Republicans got some support from Maine Independent Angus King, who typically sides with Democrats. King said a funding shift would simply avoid dealing with the finances of Social Security, which need to be shored up because of the ongoing retirement of the baby boom generation.
“This is just a way of making this problem worse when it does come,” King said. “Problems put off rarely get easier with the passage of time.”
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